The Dow Jones Industrial Average sank more than 450 points in morning trading, recording its biggest fall in two months. The S&P 500 and the Nasdaq Composite also lost more than 1 percent.
“I have no deadline, no. In some ways, I think it’s better to wait until after the election with China,” Trump told reporters in London, where he was due to attend a NATO leaders meeting.
“But they want to make a deal now, and we’ll see whether or not the deal’s going to be right; it’s got to be right.”
In October, the world’s two largest economies announced they had reached a partial trade agreement, in principle, on intellectual property, financial services, and agriculture. Both sides have been working to finalize the phase one agreement for signing.
Trump earlier suggested that both leaders could sign the deal in mid-November at the Asia-Pacific leaders’ summit in Chile, but the summit was canceled by the Chilean government.
Hong Kong Bills
U.S. Commerce Secretary Wilbur Ross on Dec. 3 also commented on the China trade deal that contributed to the sharp drop in stock prices.
Ross told CNBC the United States was set to impose new tariffs on Chinese goods on Dec. 15 unless there was substantive progress in trade talks before then. He also said there were no planned high-level trade talks with Beijing before the Dec. 15 deadline.
“The president’s objective always has been to get the right deal independently of when or anything else like that,” Ross said. “So his objectives haven’t changed, and if we don’t have a deal, he’s perfectly happy to continue with the tariffs as he had. So he feels we’re in a pretty good position one way or the other.”
Ross also noted that the Hong Kong bills have complicated the trade talks.
“I think the new variable is the whole Hong Kong situation. That has complicated life for President Xi,” Ross said.
“They got somewhat upset when the president signed the bill. Well, the reality is that the bill was going to be enacted anyway because they had a veto-proof majority in the Congress.”
“Nonetheless, they did announce the retaliation about the Navy vessels not going into Hong Kong. That’s not a big deal. We can very well live without the port of Hong Kong.”
In retaliation against U.S. support for Hong Kong protestors, China’s foreign ministry announced on Dec. 2 that Beijing had decided to “suspend reviewing requests of U.S. military vessels and aircraft to visit Hong Kong.”
Trump signed two bills into law on Nov. 27 to support pro-democracy protests in Hong Kong, prompting a strong reaction from China.
One of the bills, the Hong Kong Human Rights and Democracy Act would require the U.S. secretary of state to certify annually whether Hong Kong is “sufficiently autonomous” from China to warrant the special trade privileges currently afforded to it.